PhD portfolio manager John Hussman advises investors to "run" rather than walk away from "market conditions among the most negative 1 percent of observations on record." In a letter to shareholders published Monday, the data-crunching former finance professor and head of the eponymous Hussman Funds issued his latest warning about "overvalued, overbought, overbullish markets."

Hussman advises investors to ask themselves "what portion of your portfolio do you expect (or even hope) to sell before the next major market downturn ensues? Almost by definition, that portion of your portfolio is speculative in the sense that you do not intend to carry it through the full market cycle…With respect to those speculative holdings, and when to part with them, my own view is straightforward. Run, don't walk."

Hussman's dim view of stock market returns in the coming decade, and the next six to 18 months particularly, is based on a view of market metrics he believes investors have not (yet) come to share. For example, he criticizes Wall Street's infatuation with current, low price-to-earnings multiples.

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